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Out-of-pocket spend on healthcare in India is as high as 62%: Max BUPA CEO

BENGALURU: Private health insurer Max BUPA Health Insurance Co started operations in 2008, and a decade later services 2.6 million customers. From new products like Any Time (Health) Machines (ATMs) to innovative products like GoActive, Max BUPA CEO Ashish Mehrotra tells TOI what is changing in the healthcare and health insurance space.
With government insurance schemes, employee group health programmes and individual retail purchase of health insurance, how is India in terms of insurance coverage?

India falls way short of the required mark. Yes, government schemes in certain states have made deep inroads into servicing underprivileged and lower middle income groups. But India still has a long way to go.

In India, out-of-pocket spend is as high as 62%. Now, in developed countries people spend only 10-12% from their own pockets and the rest is covered by insurance. Even when compared to its peers - the BRICS nations - India fares poorly. Russians spend only 40% from their own pocket, the Chinese 30%, Brazilians 25% and South Africans as low as 6.5%.

Could you tell us about your health ATMs. How have these been received and adopted?

Now, after the report customers have the option of buying a health policy for themselves in 3 minutes. Or they can ignore that and just visit our health ATMs any time for free health checks. And we've been overwhelmed by the response to our machines.

What is your distribution channel for health ATMs and how have customers responded?

Initially we opened the health ATMs through our bancassurance partners like Bank of Baroda and Karur Vysya Bank. We installed 7 machines in different cities; in a short while we'll increase this to 18-20.

Within 180 days of the launch, we saw more than 2,000 leads generated. And we hope the machines will help bancassurance sales grow 2.5 times in the next 2-3 years. We also plan to launch these machines at shopping malls and airports in the near future.

Maybe in a few years our health ATMs will become an independent sales channel of its own and contribute to 15-20% of total digital sales.

Medical inflation seems to be an ever-present problem. Hospitals keep charging more with every passing day. How do you as an insurer counter that?

Medical inflation in India is at 10-12% annually. So, what we did is - when we launched our product ‘Go Active’ - we also included this clause whereby the sum insured would automatically increase 10% with every passing year. And this is irrespective of whether you make a claim or not.

Many customers lose out on a no-claims bonus, premium discount or on enhanced benefits the minute they put in a claim. But with our product that won’t be the case.

Also, our product is ideal for something like the new amendment to cover mental health insurance. It takes care of behavioural challenges, counselling, OPD expenses and other possible fallout of someone developing any illness - be it mental or physical.

You talk of behavioural challenges, could you expand on that?

See, when someone gets diagnosed with cancer, it’s not just the bills that need to be taken care of. They need some amount of handholding; emotional support to deal with chemotherapy, possible hair fall and possible shock, when they first heard the news.

So, we believe in being a comprehensive and holistic healthcare solution provider. And mental health and well-being form a core component in the way we design our insurance policies. We also have the lowest waiting period for pre-existing conditions in the industry. For our heartbeat policy, there’s just a 30-minute waiting period before we start coverage.

How much does digital comprise your overall sales?

Today, 76% of our sales are being done electronically. Either by our agents on their tablets using InstaInsure or via web aggregators or direct online sales.

Over the years, our claims experience has also gone digital and paperless. Earlier only a minor portion of our claims were cashless settlements. But today, 70% of claims processed by us are cashless (showing the extent of hospital networking - 4,800 hospitals in our network and modernisation) and only 30% reimbursements.

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